SACRAMENTO - By a 22-14 vote, a bill to exempt a proposed NFL stadium in Industry from state environmental law earned approval Wednesday night in the state Senate.

The special legislative session, which convened Wednesday to deal with pressing state matters, began weighing the bill late in the day while Senate President Pro Tem Darrell Steinberg hung on to the hope a settlement would be reached in the project's legal challenge.

The bill, sought aggressively by billionaire Ed Roski Jr. and his Majestic Realty Co. in September, would grant the 75,000-seat stadium project an exemption from the California Environmental Quality Act, the environmental law that governs development.

To take effect, the plan must be signed by Gov. Arnold Schwarzenegger.

The vote came after a group of Walnut residents couldn't reach a settlement on their lawsuit challenging the project's environmental study.

"The Industry stadium project would be a much-needed $2 billion shot in the arm," said Sen. Curren Price, D-Los Angeles, who was one of four senators co-sponsoring the bill.

If the citizens group had agreed to a settlement crafted by Steinberg, Walnut and surrounding cities would have received $2.5 million in traffic and school-related measures to alleviate the impact of the stadium complex, according to Steinberg's office.

Majestic Realty would have paid for a $250,000 upgrade to an air filtration system at Walnut Elementary School, $160,000 for a blinking pedestrian crossings on Grand Avenue, two new intersections added to Grand Avenue and $325,000 in attorney's fees, staff in Steinberg's office said.

In the settlement offer, Steinberg also proposed closing Grand Avenue from the 10 Freeway to the stadium site and asking Caltrans to do $300,000 worth of studies to determine whether dedicated freeway ramps to the stadium site were possible.

The approval marks the furthest any developer has gone with a stadium plan in the Los Angeles area in years.

The project, proposed for 600 acres near the 57 and 60 freeway interchange, was approved by Industry but was held up by two lawsuits. Walnut filed a lawsuit in March challenging the stadium complex's environmental study. The Walnut citizens group filed its lawsuit the same month.

After being pushed into settlement talks by Steinberg, Walnut settled Sept. 22 for $9 million and other compensation.

"If I hadn't taken the action I did on Sept. 11, the community of Walnut wouldn't have anything," Steinberg said.

Two amendments, brought forward by a San Diego lawmaker to tweak the bill, were defeated.

Sen. Mark Wyland, R-Carlsbad, introduced one amendment that would prohibit Majestic Realty from bringing other California teams to the stadium.

"There is no net economic benefit to this stadium," Wyland said. "There is if you get another team from out of the state."

The second endowment, also by Wyland, would have granted a CEQA exemption to a San Diego stadium.

Senators from San Diego were concerned that Roski would lure the Chargers north to Los Angeles County.

The bill was considered despite attempts by Steinberg to work a settlement up until the last minute and the citizens group's push for more time to weigh an offer from Steinberg's office.

Steinberg, who said publicly the bill would be passed if a settlement wasn't reached, privately pushed for an agreement. The Senate leader missed a handful of votes before the bill was passed while he made calls to Walnut Councilman Joaquin Lim and members of the citizens group.

Only two hours before the vote, Steinberg, state Sen. Gloria Romero, D-Los Angeles, Assemblyman Isadore Hall, D-Compton, Majestic Realty Vice President John Semcken and others held an impromptu closed-door meeting in the Senate chambers hashing out a deadline to end last-minute negotiations.

Brigid Bjerke, a member of the Walnut group Citizens for Community Preservation Inc., said she was saddened that the Senate took up the vote. "We're very disappointed."